Seminar: Timely Topics for Today’s Business World

Mr. Bernstein

Fundamental Analysis

February 2013

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Seminar: Timely Topics for Today’s Business World

Mr. Bernstein

Fundamental AnalysisEvaluating the value of a security by investigating the intrinsic

(fundamental) value of the underlying businessBelieves true indicators of future earnings potential are reflected in

financial statements:• Competitive Advantage• Earnings Growth• Sales Revenue Growth• Market Share• Financial Reserves• Quality of Management

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Seminar: Timely Topics for Today’s Business World

Mr. Bernstein

Fundamental AnalysisCommon tools include:• Earnings per Share – EPS • Price to Earnings Ratio – P/E • Projected Earning Growth – PEG • Price to Sales – P/S • Price to Book – P/B • Dividend Payout Ratio • Dividend Yield • Book Value • Return on Equity

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Seminar: Timely Topics for Today’s Business World

Mr. Bernstein

Fundamental AnalysisIs in contrast to Technical Analysis, which assumes all relevant

information is reflected in stock prices, and thus focuses its analysis on stock prices rather than company information

Is in contrast to Efficient Market Theory, a theoretical construct which assumes all new information is immediately incorporated into stock prices, making it impossible to outperform benchmark over any meaningful period and thus arguing against individual security selection